Equity, Diversity and Inclusion

Why venture capital should commit to gender balance

School children from Sierra Leone.

Investing in digital public goods can help improve access to education and achieve equality. Image: Unsplash.

Sanna Bedi
Innovation Fund Officer, UNICEF Innovation
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Private Investors

  • The global pandemic has adversely affected women and exacerbated inequalities.
  • Private capital can help female-led/founded companies as well as build digital solutions that address women's issues.
  • UNICEF’s Innovation Fund invests in open-source technology and aims to reach 50% female-led investments in its portfolio.

The COVID-19 pandemic has had a devastating impact on women's economic opportunities, mental health, wellbeing, and livelihoods. Female workers were among the hardest hit by the crisis – with over 64 million jobs lost in 2020 – as were female entrepreneurs and job creators. Moreover, the persistent gender digital divide has led to greater inequality in accessing digital devices and online services such as education, healthcare, and credit from financial institutions.

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Globally, over $25 billion has been committed for gender-related COVID-19 responses and recovery since the early stages of the pandemic. This includes a range of pervasive issues such as gender diversity, women’s empowerment, inclusive education and work, protection of sexual and reproductive health, food security, gender-based violence, and support for women-owned small and medium enterprises (WSMEs) - which has been the top priority for stakeholders.

However, of the total allocation for gender issues, private sector commitments only account for 2%. Furthermore, it is well-known that globally only 2-9% of venture capital (VC) funding goes to female-led companies. According to a recent report, not only did global venture funding for female-led startups fall this year, but that the proportion of funding also declined from 2.8% in 2019 to 2.3% in 2020.


What's the World Economic Forum doing about the gender gap?

As we emerge from this unprecedented crisis, venture capitalists – LPs, angel investors, and the media – have a unique opportunity, to not just build back better, but to invest in a resilient recovery for all, especially women. Lack of action to address the growing gender inequities could result in long-term labour market impacts for women, including a reduced or stagnant female labour force participation rate and a reduction in global GDP by 2030.

While an entire industry-wide movement toward gender diversity is needed, VCs can lead this change by investing in gender-focused solutions that can increase access, connectivity, and opportunity for the most vulnerable populations. Venture funding could spur greater public-private partnerships for inclusive and open-source business models and generate locally replicable solutions at a fast pace.

At UNICEF Innovation, we believe that investing in and supporting the growth of female-led companies is smart investing, and is now more important than ever. We need to tap into and support underrepresented innovators and problem solvers to ensure solutions improve the lives of the traditionally underserved. Here is how we’re doing it:

  • Investing in female-led companies: 40% of the UNICEF Innovation Fund portfolio consists of female-led/founded startups. In fact, five out of eight (over 62%) of the fund’s most recent investments in open-source, blockchain-based solutions are female-led. This cohort is building platforms toward greater financial inclusion to enable efficient payments to frontline workers, facilitate cross-border transfers, and improve access to saving and lending services.
  • Building gender-transformative solutions with women: Tailored to girls’ digital realities, an example of a solution developed by UNICEF is Oky, an open-source mobile period tracker and menstruation education application. The app was co-created with girls in Mongolia and Indonesia through extensive user-centred design, co-creation sessions, and remote and in-person user testing, enabling the team to bridge gender digital gaps; it now has over 10,000 downloads.
UNICEF Innovation Fund has made 113 investments in startups from 67 emerging markets.
The UNICEF Innovation Fund has made 113 investments in startups from 67 emerging markets. Image: UNICEF

Success stories from female-founders in our portfolio

  • Afinidata, led by CEO and Founder Andreana Castellanos, offers a personalized virtual assistant that guides parents with early childhood development tools for children under the age of six. So far, they’ve delivered over two million educational sessions through their platform. As a response to the pandemic, Afinidata is providing one free month to their premium services, which includes COVID-19-related advice based on recommendations from the WHO.
Team Afinidata (L-R) Ana Sagastume, Lucia Godoy, Ingrid de Escobar, Andreana Castellanos, Estuardo Diaz y Magaly Rodas.
Team Afinidata (left to right): Ana Sagastume, Lucia Godoy, Ingrid de Escobar, Andreana Castellanos, Estuardo Diaz and Magaly Rodas. Image: Afinidata
  • Thinking Machines is a data science consultancy founded by CEO and Lead Data Scientist Stephanie Sy. It has developed GeoAI, an end-to-end geospatial data platform optimized to help organizations operating in fast-developing locations make smarter strategic decisions. As a response to COVID-19, they support the needs of policymakers, analysts, and epidemiologists through their data engineering work, and build data visualizations to share insights with the public in a timely and accessible way.
  • Avyantra has developed a machine learning model that captures the data of newborns with neonatal sepsis conditions and their associated treatments. Co-founded by Hyma Goparaju, the platform supports early diagnosis of neonatal sepsis, reduces diagnosis errors, improves antibiotic rationalization and thereby aids in significant reduction of neonatal mortality rates. Over the past year, Avyantra developed a continuous positive airway pressure (CPAP) device for non-invasive ventilation. The CPAP device can be used for respiratory therapy for treatment of patients with respiratory distress, a common symptom among people affected by COVID-19.
Avyantra Health Technologies co-founders Hyma Goparaju and KVKLN Rao receiving AFI Best Indian Social Enterprise Award 2019.
Avyantra co-founders Hyma Goparaju and KVKLN Rao receiving the AFI Best Indian Social Enterprise Award 2019. Image: Avyantra Health Technologies.

Calling for action

There is a crucial need to invest in women and in solutions that can bridge the gender digital divide. Collaborative creation and the scaling up of digital public goods will help to achieve equity in education, healthcare, and employment. This will contribute to a future where every child, and every gender, can survive and thrive.

We call on the VC community to make this same commitment toward a truly gender balanced portfolio. As a step forward, UNICEF’s Innovation Fund is seeking startups using AI and/or machine learning to improve access to and delivery of digital services and systems, especially focused on education or health. Apply for $100,000 and tailored mentorship now at unicefinnovationfund.org.

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Equity, Diversity and InclusionHealth and Healthcare Systems
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